Progressive reveals how it plans to distribute $1 billion in refunds to auto policyholders

Progressive’s auto insurance division recently announced that it will begin paying back about $950,000 in excess profits taken in over the past three years from its policyholders in Florida.

The average credit would be about $300, Gov. Ron DeSantis said during a news conference on Oct. 22. “It might be a check. It might be a credit on your bill,” DeSantis said.

But the company left customers confused over how that payback would take place. In a written statement later that day, a Progressive spokesman said policyholders would receive “a credit” in 2026.

Progressive’s spokesman Jeff Sibel on Friday, Oct. 31, clarified how the company plans to issue the credits.

First, although state law requires that insurance companies determine whether excess profit was collected over three policy years, Progressive said the law also stipulates that only customers with active policies on Dec. 31, 2025, will qualify for the credit.

That means that anyone who was with Progressive in 2023 and 2024 but switched to a different company in 2025 won’t qualify. The company insures about 2.7 million Florida drivers.

The amount of the credit will depend on what drivers paid for their policies — and how much excess profit in Florida is identified by the company at the end of the year, Sibel said.

“The actual credit amount for each policyholder will vary in proportion to each auto policy’s earned premium during calendar year 2025 and will depend on final year-end financial results for 2025,” he said.

And whether policyholders receive the credit in the form of a check or a renewal discount will depend on how they paid — or are paying — their premiums, Sibel said.

“Active Florida policyholders as of 12/31/25 will not need to take any action to receive a credit in 2026,” he said. “If an eligible policyholder has an outstanding balance or renewal payment due, they will receive a credit on their statement. If the eligible policyholder has no balance due, or their credit is greater than their next payment, the remaining credit will be returned via their recent regular payment method.”

Presumably that means that policyholders paying in installments will not receive a check unless the refund amount exceeds the remaining balance due on their accounts.

If their policy is set to renew, the amount they owe will be offset by the amount of the credit.

Only policyholders who paid their premiums in full will get money back from the company and will get it in the way they paid — credit card, direct deposit or check.

DeSantis on Oct. 22 said that excess profits and reduced rates for policyholders going forward were made possible by insurance reforms enacted on 2022 and 2023 by Florida lawmakers.

Those reforms, also intended to reduce costs for home insurance companies, struck down a longtime Florida law that enabled plaintiffs attorneys to collect legal fees from insurers if litigation prompted insurers to reduce their original settlement offers by any amount.

They also overhauled the state’s “bad faith” laws and prohibited contractors from requiring policyholders to sign over benefits of their insurance policies as a condition of commencing repairs.

The reforms have sharply reduced the number of lawsuits filed against insurers in Florida by disincentivizing litigation over smaller claims. Plaintiffs attorneys have argued it has emboldened insurers to underpay and deny more claims, knowing that chances of being sued over the decisions have dropped.

State Farm last week said it has reduced its rates by more than 20% over the past year, delivering an average $400 in savings to its policyholders. It did not announce whether it has generated excess profit or will be required to return any portion of premiums paid over the past three years.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at rhurtibise@sunsentinel.com.

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